Synopsis: Communication For Productivity
Letters written to some 7500 Workers / Managers /
Union Leaders, following a period of strike / Go slow / Murders (1979 -
1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open /
honest communication led to a remarkable atmosphere of trust between
Workers and Management, which, in turn, increased productivity at 3% per year
(ave).
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25 Jan 1981
To:
My dear Mr.
THE CART
BEFORE THE HORSE !
Sub: A
scheme to link up Productivity with Bonus
Ref: Your
letter dt. 28th December 1980
In your
above mentioned letter, you have expressed many thoughts. I agree with some of
these and do not agree with some others.
Matters on
which we agree:
1. When the salient working results of the Company
appear in the newspapers, workers start voicing their aspirations on bonus and
after the company's Annual General Meeting, pressure groups start expressing
demands.
2. The Management and the Union should work together
to find a permanent solution to the bonus problem.
Matters on
which we differ:
1. If the Management and the Union are to work
together to find a permanent solution to the bonus issue, it should not only be
'in line with the workers' expectations', but, it should be in line with the
Management's expectations as well.
2. Linking Productivity with bonus does not appear to
be the 'permanent' solution that you and I seek - not at least in the near
future.
What makes
me disagree with you? Let us examine:
Whereas, it
is not difficult to think of a Scheme of linking productivity to bonus, where
is the assurance that it will work?
Both, the
Union and the Management, made one such attempt in January 1979. In our 4-year
Agreement, we linked productivity with substantial benefits granted to the
workmen averaging approx. Rs.200/- per month. On 'give-and-take' basis, the
Union and the workmen undertook to raise the individual/departmental
productivity indices by 25 points. That was the linkage.
Nearly two
years have elapsed since we first established this linkage - what do we find ? The
workmen continue to receive Rs.200/- month after month, whereas the performance
indices have largely remained where they were in January' 79 and in stray cases
marginally gone up - or even down !
And we
cannot say that the workers/Union are unaware of the commitment made by them or
unaware of what has actually happened ! With 3-tier Productivity Committees
constituted in September '79 (and announced jointly by Mr. the then General Secretary
and myself) and the number of monthly meetings taking place, it would be
difficult to say that there has been any communication failure in this respect.
Despite necessary efforts, both on the part of the Union office bearers and the
managers, the results are simply not there ! Why is it that despite so much
good-will and communication, the increase in performance indices by 25 points
remains a dream?
This is the
key question to which all of us must address ourselves. Till such time, we find
an answer to this question, (and implement the same) we should not, I believe,
attempt linking poor productivity to anything else;
And I
believe, I know the answer.
The answer lies in the very human nature. An individual would make additional efforts if he could expect to be reasonably rewarded for- the extra efforts. This is the basic effort/reward relationship. What apparently went wrong with our 1979 Agreement is that we put the 'cart before the horse'. I strongly feel that instead of giving away the reward of Rs. 200/- in advance, had we linked the reward of Rs.8/- per rise of each P.I. point and rewarded only after the PI has actually gone up, we would have by now, attained a total rise of 25 points or perhaps morel
The linkage
was supposed to be already there but the effort/reward relationship was twisted
!
Should we
not straighten out our existing 'twisted' links first before we think of adding
others?
Yours
sincerely,
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